Gildan Reports Record Second Quarter Revenue and Adjusted Diluted EPS Superscript 1 and Updates its Full Year 2025 Guidance

Executive Summary

• Gildan Activewear reported record second-quarter 2025 net sales of $919 million, a 6.5% increase year-over-year, driven by a 12% surge in Activewear sales.
• The company achieved record adjusted diluted EPS of $0.97 (up 31.1% YoY) and GAAP diluted EPS of $0.91 (up 160% YoY), supported by improved gross margins and lower tax expenses.
• Gildan narrowed its full-year 2025 adjusted diluted EPS guidance range to $3.40–$3.56 (previously $3.38–$3.58), reaffirming mid-single-digit revenue growth and above $450 million in free cash flow.

Key Details

• Q2 2025 Financial Performance:
  • Net Sales: $919 million (+6.5% YoY); Activewear sales $822 million (+12% YoY); Hosiery and Underwear sales $96 million (-23.3% YoY).
  • Gross Profit: $289 million (31.5% margin, +110 bps YoY).
  • Operating Income: $199 million (21.7% margin); Adjusted Operating Income: $209 million (22.7% margin).
  • Net Earnings: $137.9 million; Adjusted Net Earnings: $145.9 million.
  • GAAP Diluted EPS: $0.91; Adjusted Diluted EPS: $0.97.
  • Cash Flow from Operations: $188 million; Free Cash Flow: $154 million.
• Year-to-Date (YTD) Performance (6 Months):
  • Net Sales: $1,630 million (+4.6% YoY).
  • Operating Income: $329 million (20.2% margin); Adjusted Operating Income: $344 million (21.1% margin).
  • GAAP Diluted EPS: $1.47; Adjusted Diluted EPS: $1.56.
  • Free Cash Flow: $(11.5) million (vs $32.6 million prior year), due to higher working capital investments.
• 2025 Full-Year Guidance:
  • Revenue Growth: Mid-single digits.
  • Adjusted Operating Margin: Up ~50 basis points.
  • Capital Expenditures: ~5% of sales.
  • Adjusted Diluted EPS: $3.40 – $3.56 (previously $3.38 – $3.58).
  • Free Cash Flow: Above $450 million.
• Q3 2025 Outlook:
  • Net Sales: Expected up low single digits YoY (due to timing shifts of orders from Q3 into Q2 and Q4).
  • Adjusted Operating Margin: Expected to remain similar to Q2 2025 levels.
• Capital Allocation & Balance Sheet:
  • Capital returned to shareholders in Q2: $145 million (share repurchases and dividends).
  • Capital returned to shareholders YTD: $206 million (including ~2.9 million shares repurchased under NCIB).
  • Net Debt: $1,848.5 million; Leverage Ratio: 2.2x (within target range of 1.5x–2.5x).
  • Long-term Debt: $1,856.3 million.
• Operational Highlights:
  • SG&A Expenses: $82 million (GAAP); Adjusted SG&A: $81 million (+21% YoY excluding proxy contest costs).
  • Tax Rate: Adjusted effective income tax rate was 17.4% (vs 27.2% prior year), primarily due to the enactment of Global Minimum Tax and Barbados tax reforms.
  • ESG: Recognized as one of the Best 50 Corporate Citizens in Canada by Corporate Knights and included on TIME’s World’s Most Sustainable Companies list.

Notable Quotes

• "The Gildan Sustainable Growth (GSG) strategy continues to drive solid financial performance, as evidenced by our record second quarter results, driven by strong net sales growth of 12% in Activewear. As we navigate through the current fluid operating environment, we are focusing on what we can control, which is allowing us to continue to strengthen our competitive position and drive profitable top line growth." — Glenn J. Chamandy, President and CEO